Daily Archives: January 4, 2017

Exchange rates for buying Euros and Dollars showing mixed results to begin the New Year (Joshua Privett)

The Pound has begun the year without much clear direction following what had been quite a difficult festive period for buying Euro and Dollar exchange rates.

GBP/EUR and GBP/USD have shown some gains whilst anyone with an Australian Dollar interest has suffered the most so far in 2017, with a loss of 3 cents on GBP/AUD recorded within the past 48 hours.

Frankly, this is a return to some normality on currency markets. With the Brexit dominating headlines for the final 6 months of last year, markets were remaining flat until any little piece or morsel of news came our regarding the mechanics of the Leave process, and many other events were largely ignored.

Some are now arguing that markets have adjusted to this new ‘reality’ of a long and pro-longed Brexit negotiation and are beginning to return to some semblance of normality. Rates to buy Euros, US Dollars and Australian Dollars now seem to be paying attention to daily releases in economic performance data which had largely been ignored for the last 6 months when determining the value of each major currency.

For example Sterling enjoyed strength to begin the year when performance figures for our manufacturing sector were through the roof (as a cheaper Pound encourages buyers to come to the UK’s shores), and the Euro benefited from similarly positive inflation figures released at 10:00 this morning. This explains the roller-coaster on GBP/EUR over the past few days as both have gained value against the other.

A medium-term look at Sterling exchange rates still sees potential opportunity between the 12-17 January when it is expected the Supreme Court decision on Parliament’s role in leaving the EU will be decided.

The heavy expectation is for the Supreme Court to uphold the Judicial Court’s decision in November to allow Parliament the vote on triggering Article 50, which contributed to the strong Sterling boost that month – and is why most major financial institutions expect a mirroring of this Sterling strength in January.

In the short-term, we can look to economic data for clues on forecasts for Sterling Euro, Sterling US Dollar and Sterling Australian Dollar exchange rates.

The key piece of data this week will be Friday’s unemployment figures in the US, which will send ripples throughout the financial markets, and if last month’s was anything to go by, will likely present further opportunities for Euro and Australian Dollar buyers alike.

With a positive short-term view for anyone buying a foreign currency, and the anticipation of medium term gains, anyone looking to sell Euros, US Dollars or Australian Dollars will be wise to look at their options to protect an upcoming transfer into Sterling from becoming more expensive.

Anyone with a foreign currency purchase later on in the year would be best placed to monitor the markets over the next few weeks, and if you do not wish to leave yourself exposed in the run up to the triggering of Article 50, can secure an exchange rate there and then if any tempting opportunities emerge, whether for an immediate transfer or one planned for the future – it is a simple process to pre-book your currency using the exchange rates available that day.

I strongly recommend that if you have a planned transfer either to buy or sell Euros or Dollars before April this year, you should contact me overnight whilst markets are quiet on jjp@currencies.co.uk. I will respond as soon as I am able to discuss a strategy for your transfer to ensure tempting levels are seized quickly, and that your upcoming transfer is protected from any prospective dips in the marketplace.

Furthermore, I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation should save you thousands on an upcoming transfer. I am happy to provide a quote for your transfer to demonstrate this.

I have had quite a few new clients recently who said their previous broker suggested they had to move immediately with the formal Brexit proceedings looming, but in this market, as has been proven in recent months, there are still heavy opportunities for foreign currency buyers even in the next few weeks.

 

 

Where Next for Sterling Exchange Rates? (Matthew Vassallo)

The Pound made gains against its EUR counterpart during the first day of 2017 trading, following positive UK Manufacturing data released yesterday morning.

The figure came in well above market expectation and this immediately gave Sterling a boost, although it still struggled to make any significant impact against the USD.

GBP/EUR rates spiked by over a cent, with the pair hitting 1.1792 at this morning’s high. This has once again presented those clients holding Sterling with an opportunity and considering the recent volatility on the pair and the fact Sterling is struggling to sustain these improvements, I would be very tempted to take advantage if I had a short-term GBP/EUR requirement.

We are still no closer to understanding how we will facilitate our exit from the EU, when Article 50 is triggered (assuming the timeline remains the same) in March. This market uncertainty has been a huge weight around the UK economies shoulders and as such the Pound has struggled to make sustainable improvement against the major currencies.

With the debate continuing to rumble on as to whether we are going to see a soft or hard Brexit, the market and investors are continually having to second guess the likely outcome. This means that any improvements for the Pound have been relatively short-lived and this was one of the main reasons I felt clients who were holding Sterling positions should be looking to take advantage of any short-term spikes.

The UK economy remains extremely fragile and whilst any information released by UK Prime Minister Theresa May regarding how we will facilitate our Brexit, is likely to help remove some of this uncertainty, so far we are yet to hear any real plan or long-term vision.

Looking ahead and we have UK Construction data out this morning followed by Services figures on Thursday, so expect further movement for Sterling over the coming days.

If you have an upcoming Sterling currency exchange to make, we have a team of experienced brokers who can help guide you through this turbulent market and provide you with the best exchange rates under any market conditions. If you would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to call us on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, I can be emailed directly on mtv@currencies.co.uk